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Were You Affected By Today's ICE DXY Order Cancellation? Let Us Know
Due to numerous external inquiries and complaints, we would like to solicit reader input from those traders who were impacted by the ICE's cancellation of 12,000 DXY contracts voided on November 3rd (8,000) and also today on November 20th (4,000). As a reader submits:
Talking to ICE, all of these trades in question involving these spike highs were busted (ICE would give no explanation as to why the trades were busted, written or verbal). Thus, we just spoke to our attorneys and are contemplating the possibility of filing a federal "class action" claim, or a federal arbitration claim, against ICE and their affiliated exchanges for erroneously busting these trades. We are interested in forcing them to disclose who (i.e. firms, maker makers, etc.). participated in these cancelled trades, at what price and volume, and request WHY these trades were cancelled.
So if you had any direct capital loss as a result of the DK'ed trades, please leave a comment or send us an email.
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Great Job.....you guys are the best. They did the same thing several weeks back. Nov 3 5:00am - they canceled high prints with no explanation given.
Wouldn't we all be affected? It has been widely documented, in the pages of ZH no less, that we have a dollar vs. all other assets trade going on. I read "direct capital loss as a result of the DK'd trades, but are you considering anyone with collateral damage?
Weeks ago I had purchased 200 UUP calls expiring 11/21 with a strike price of 23 after I saw the news break here that a number of individuals had bought significant calls. If the trades had been allowed to go through, UUP would have been in the money to say the least. Instead, they will expire worthless because the financial cabal does not want to lose money (in other words they were on the wrong side of the trade - shorting the USD, how un-american ;) ). Apparently, they don't want a strong US Dollar - we should be able to get a populist anger up about that.
Aye same, I have/had NOV 23 UUP calls (I'm small time)
If these trades had posted I would be ITM.
I may not be direct damage, but this collateral damage hit me as well
I wish there was more public understanding of the PPT that operates under Executive Order 12631 ( http://www.archives.gov/federal-register/codification/executive-order/12631.html ) . This order allows any action "legal" who decides what is legal and where is the accountability? Sadly, the whole FOIA will not help us since this little puppy is likely sequestered away under the title of national security--and if that is so, i guess the public needs to know that the primary dealers and all of their proprietary trading and their nudges and winks to affiliate funds is also part of national security (i said sarcastically) .
If all of the individual investors knew that the government was stepping in to drive up and down different markets 'all for our own good and to save us from the world end of the world as we know it', i wonder who would continue to consider their money in the market as "investment funds" instead of classifying the funds more appropriately as "gambling" funds.
The Audit the Fed bill ( S604) would have a better chance of passing if the public knew about the actions of the PPT. Seriously, the public only needs to get a whiff of this for there to be a huge outcry to simply shut down the privately held federal reserve corporation.
Yes Tyler I had just bought one DXZ9 at 75.630 when it sat back on the pivot finding support on it and then about 15 minutes later it shot up. I sold it at 79.500 pocketing a nice profit of about $ 4,069.50 in a matter of minutes. We trade with Interactive Brokers and after abou one hour they just took the money out and sent a communication online reverting the transaction................
Let me know if or what I can do.
Keep up the excellent job!!
What if they were legitimate trades? And not a fat finger?
But that could cause a big equity sell off and can't be having that can we? But... if it could have caused a big equity surge, not a peep would be uttered about it.
Precisely the point - The can't have a short squeeze and that is exactly what those two events point to. When a coordinated print(s) hit that is exactly what you get.
Couldnt agree more, i was expecting a 9% down day also. But, if the dollar went down 9% today we'd be havin us a partee right now. This gets more silly by the day to the point it's laughable.
happened on nov 3rd as well.
early morning dollar spike, futures tank, and then puff (not like the magic dragon) the dxy trades just disappear.
I'll save you some time. ICE will probably tell you to piss off and direct you to read their rules:
https://www.theice.com/publicdocs/rulebooks/futures_us/27_Electronic_Tra...
The relevant section is Appendix 1.
My understanding is that trades are busted when, and only when, the counterparty agrees. Say the party made a mistake and you agree to void it because next time it may be you the fat finger. All between gentlemen, but not all of them.
Now the exchange jump ahead and say it's busted because they say so. Bad business. They must come clean and disclose all information or the affected counterparties may go elsewere. Lack of confidence can blow up a financial institution overnight.
I've been on both sides of many busted trades. It isn't gentlemanly. Everyone wants the best price they can get. If the other guy screwed up... I'm not going to feel bad about it. He wouldn't for me, either. On certain occasions, exchanges will offer a "bust or adjust" in which they will ask the "benefiting" side if they are willing to offer the side that screwed up a more reasonable price, in the interest of avoiding a ruling by the exchange (most likely a trade bust.)
The exchanges have general guidelines that they follow when evaluating whether to bust trades. But, the final guideline is "we do what we want." To say they can be inconsistent in rulings/explanations is an understatement.
(Note: I have no experience with ICE specifically.)
Bust a deal, face the wheel. [/mad max]
Mad Max Beyond Thunderdome. Tina Turner was HOT in that film.
http://www.imdb.com/title/tt0089530/
You saw the news that the HKMA bought 2 billion US dollars, this may be related. It could be considered an act of intentional financial sabotage, or merely an attempted investment. Delivery on the physical gold and silver comex contracts should be interesting (Asian).
We must get to the bottom of this, it shakes confidence in our markets to post trades and then have them wiped out. Someone should share the inside scoop with a leak.
i have a UUP position of 1000 shares bought 1.5 mo ago.
These future trades were cancelled because they represented moves outside the market norm (usually considered 1%, but decision made only after investigation). Nothing unreasonable in cancelling, but the question remains, who placed the orders and why? See the following:
LONDON (MarketWatch) — The IntercontinentalExchange is probing trades in U.S. dollar index futures that briefly showed a massive 9% jump on Friday morning. The lead contract surged as high as 82.18, up from a 75.38 close on Thursday. Such a move was improbable given that in spot markets, the dollar’s moves against major currencies such as the euro were limited to about 1%. See Currencies.
The ICE agreed, and according to an exchange official, all trades above 76.50 were being cancelled. The ICE was still investigating the cause of the incident, the official said. Dollar index futures were still elevated after the incident, up a more modest 0.7% to 75.91. The move briefly had an impact on other markets, as futures on the Dow Jones Industrial Average fell as much as 99 points
yeah i got impacted this AM. if a tree falls in the forest and no one hears it fell silent.
Yes I had 1 busted and my 8 other orders were very questionable. I saw the spike and sent all 9 of my dx longs to sell at the market. For SOME REASON only 1 was filled at 79.09 and the 8 others never filled at the market even after being in there for more than 15 mintutes after the spike...(something very fishy). I finally got a call saying my 1 order being "busted" and my 8 other OPEN MARKET ORDERS were never filled even though they had been sitting in there when things quieted down??? THANK YOU ZERO HEDGE!!
Maybe your orders were routed into a smaller exchange (even in house) were no bids were available. It happens and they don't get re-routed. Ask them were your orders were sitting, say you are considering to move elsewhere if the answer is not clear.
Thanks nonclaim, I am pretty disgusted about the whole situation. Hopefully zero-hedge will help me get my trades back that were unrightfully taken away from me!!
TYLER / We'd like to compliment you on "stepping out of the box" on this story and following it up. We have been in touch with various news agencies who say they will be further investigating this story as well. We also plan to have our attorneys contact ICE directly next week as we gather more information. They feel that in order to pursue either a class action claim or class action arb claim, one must of directly have had their trade "cancelled" by ICE and suffered "suffered direct loss or damages" from their actions. Enough is enough. Responsible parties need to be held accountable for their actions, or negligence, in matters affecting the public such as this. Clearly, ICE is not properly managing their platform in order to protect investors (large & small) and maintaining proper exchange procedures. Thank you in the public's interest.
We were ALL affected by the busted trades. Anyone who is in any US markets was told today with absolute clarity that the Administration, the Fed, and the exchanges will do ANYTHING to prop the markets up, ANYTHING to beat short sellers or contrarians into submission, ANYTHING to stamp out any type of "financial dissent" that might be expressed against this government's economic policies. That was just some of Obama's ward bosses using their clubs today.
Come on guys how can you expect a trade like this to go through if Goldman is not properly positioned short on the market!
Only servants of God can make such a trade stick.
Ten bucks says this trade will eventually happen but that we will see an equally unusual trade in the SPY futures short and or treasury futures long before it does.
It will be a blatant, right out in the open, cram/jam job like with those Bear put options
well said Anony--key phrase:
"It will be a blatant, right out in the open cram/jam job like with those Bear Put options."
...it's just another day of government sanctioned capital market criminality...
(and for your listening pleasure:
http://www.youtube.com/watch?v=Y3nVqLfPBtw )
and just like clockwork, the dj is green, spx soon to follow.
amusingly this just appeared on my news waterfall:
3:43 (Dow Jones) In a letter to the SEC Friday, Sen. Ted Kaufman (D-Del.) urged the commission to move quicker in addressing "manipulative high frequency trading algorithms and end so-called 'sponsored access.'" The SEC has already stated it will be reviewing both issues with proposals expected in the summer of 2010 and then debated for a period of a couple months thereafter. Kaufman, however, believes too much is at stake to wait that long. "The Commission must not let months go by without taking meaningful action".
85 Broad St: Hey, we can't have the dollar go down today, we sold a lot of puts and if we lose money that could be a terrorist like situation.
33 Liberty: Oh, okay, what do you need me to do?
----------
This was across all asset classes, look at RIMM & AMZN, large gap down but the banks got them back up.
However, the shit with the guy actually having money pulled out of his account?
That's just &*($^&$ up.
---
Oh yeah... rally to the strike price without the drop in the dollar.
translation: Banks are scared shitless and covering shorts from retailers who are shorting like the idiots they are.
grow up, this stuff happens. 45mins after is bogus but if it hurts your pocket you should be on the phone directly after it happens to the exchange.
Perhaps could UUP have anything to do with this?
https://ris.rois.com/gPlvnU-048Yng6*jOqZRSxMpuxsY4yjcC-v*D8n-E7O-p/CTIB/RI3APINEWS?FORMAT=HTML&TEXT=1258153165nN13467539
I have a question, if anyone can answer, great. I've seen dozens of these types of things over the years and my reaction is wtf, of course if it happens right when you are ready to put on a trade, or have had one with whatever bias and theme, it rattles you, and you're mental capital ends up being off. Often times, imho, it happens at some turn.
So, my questions is, this almost seems intentional to me, and used as a way too do what it does rattle me, and thus, i should just stick with whatever plan for whatever reason, or am I making too much of nothing.
Thanks
Looks like we'll just have to test the definition of "reasonability limits." We think since over 8,000 contracts traded at all levels up to 81.345 on 11/03, and another 4,000+ this morning (again at all levels up to 82.18), all busted of course, a jury of maybe 6 or 12 regular people might find it is "reasonable" that ICE is indeed on the hook. We know of many stories over the years whereby a large client of a clearing firm, or the firm itself trading for their own prop account, subsequently contacts the exchange and demands they bust or cancels trades. Regulators need to make and hold these exchanges accountable.
exchanges bust trades every week. You guys really think its better not to bust error trades that are clearly errors rather than not busting them? Take away all rational and let the cpu's take over completely? I thought this site was fully against automation and the machine! What, now you like the super spike in your favor that happened in a flash?
The US markets are the best in the world. Busted trades are done when things happen that are clearly unfair and in error. This isnt the bush league gents...deal with it. If you dont like the rules, dont trade there.
... with liberty and manipulation for all.
How are those impossible DNDN trade busts going?
I was going to say the same thing. DNDN went from $20 down to $8 in a few mins. NASDAQ had no problems with this, even though plenty of investors got fucked. Why should ICE care about these spikes especially after it was the second time it happened? I don't get the opportunity to do a do-over, why should anyone else?
I do take exception with your comment: whenever spikes up 200 points in less than a f....ing 30 seconds or down as on yesterday making a lot of money to the MMs is ok, but when it spikes up and benefits us is not ok? Who should do the growing up???? If you do not like it, then you trade somewhere else.................
Anonymous squid comments do not influence, you have no credibility
the trade busting is not the issue--the fact that the PPT playing (manipulating) the market is the issue.
Maybe they were from the futures desk of Kandahar Capital Associates (formerly known as Albert Qaeda & Sons).
Hey Bennie, YBAS
YBAS- Your balls are showing. Most often usage is when playing cards. If bennie were holding the largest stack of chips and is blindly buying every pot because no one else can afford to call him.
Normal usage- Hey bennie, YBAS, eventaully someone is gonna come it here and kick them, I can't wait.
"Porsche, there is no substitute" Tom Cruise-Risky Business
Correction:
Zero Hedge, there is no substitute!
I love this website.
I was affected indirectly. My trades will continue to expire worthless if the free market is not free.
"ZeroHedge, there is no substitute!"
Well said and something everyone can be thankful for this Thanksgiving.
Thanks for the food on my table, for my health and that of my loved ones, and a big shout out of gratitude for the creation of ZeroHedge. Amen!!!
Now that that's been taken care of, how many bank failures tonight?
^5
This morning's U.S. Dollar Index futures action was an impulse response test: http://en.wikipedia.org/wiki/Impulse_response
It's no mistake that a Goldman Sachs analyst mentioned a possible 3-day 20% pop in the dollar. That mention was just yesterday.
"Busted trade" = cover story.
I like this theory - let's see how the investor class responds to being robbed in the open. It's like the Ukraine, I believe it is a test case for a financial collapse cover story using H1N1 as the excuse for martial law and to control the population response in the collapse.
Please pass the tin foil.
Movies like I am Legend and others in the zombie genre are just conditioning the populace to accept or treat those with "the disease" as already dead or zombies and it is morally acceptable to kill them before they kill you.
Now, all you have to do is paint political enemies or those that will not follow as infected - similar to labeling normal folks as potential terrorists or nazis or whatever other word that will elicit an emotional response and immediately make the majority dislike said labeled group.
The Nazis used movie propaganda and showed their targets as if they were rats scurrying about - they dehumanized them. This was the first evil step towards bringing the population around to accepting the genocide. Now what if the authorities stated that anybody not taking the H1N1 shot was a threat and could contaminate the rest of the public? (even though there have been more adverse reactions from the shot than from the virus?)
My point is that we should be on the lookout for this in any form. Would you go along with eliminating all of your cash so that it could all be tracked electronically through credit cards? Now what if you were told that paper money was a vector that could spread the "disease - whatever the threat dejure was like H1N1" and that it had to be eliminated for your own good? You might be more pliable, right?
"Today Americans would be outraged if U.N. troops entered Los Angeles to restore order; tomorrow they will be grateful. This is especially true if they were told there was an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will plead with world leaders to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well being granted to them by their world government." - Henry Kissinger
Think a few moves ahead, like in chess and pass the silver and gold.
We got hit on some oil spreads about half a year ago, when the exchange messed up price info, they gave us some back, but someone in the trade wouldn't let it to be completely cancelled.
Anyone else remember that eurodollar move a year to a year and a half ago. 100 basis point sell-off over 2 minutes and straight back-up, I was away from my desk for a couple minutes and missed the whole thing. That though was not busted supposedly wasn't a fat finger.
But moves like that are tough to trade, sometimes you get paid nicely very quickly, but often they get busted and you took the risks of trading only to see it busted.
Typo. When you wrote:
"i.e. firms, maker makers, etc."
I presume you meant either Market Makers. Or, these days, faker makers.
i was affected indirectly....because my puts on FAS would have shot through the roof if they would have let the dollar appreciate
its ashame our market is now a manipulation....and its sucks people actually think its still a market....this is bs.
end the fed
I lost $2000 on this crap. FUCKERS
If it was real the market would have stayed higher. If someone wanted to buy those they would not have called and said "please bust". Or they would have bought them later. Most busts occur when the aggressor calls who hit or lifted on accident. This is a good thing cause it means all the HFT that bought all the underlying currencies trying to sell the index got F-ed.
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The entire world is short the dollar and there's an "Obvious error" right on Options expiration and oh yeah... this Six-Sigma event is entirely unrelated to the other six-sigma event going on in the short term t-bill market... Oh yeah and that's entirely unrelated to the default of a 100% Government owned Ukranian Corporation.... but it's not related.
"We don't need to see his identification. These are not the droids we're looking for. You can go about your business"
There's errors and there's errors. Multiple black swan events in a 24 hour period are not obvious errors.
um. yes. having fat fingered and then had to get trades busted myself, i can tell u, it_happens. and the Ukrainian corporate debt that missed the payment is not backed by the government guarantee.
what this should be telling everyone, however, is just how fragile this short dollar long everything trade is.
That was my first thought exactly. It only confirmed that that DX is going to be heading higher. When??? Who knows... I added to my UUP March and June 2010 23 calls...
True... Even if it was a mistake, it was damn good timing for it to happen.
I still don't understand how state owned corporation debt isn't subject to a Government guarantee.... unless you're referring to some other model like the Fannie/Freddie one where the guarantee wasn't intrinsic.
That's how things work. You own a company, it goes bust, do the creditors have a claim for your personal assets? No unless you've explicity provided a personal guarantee or you've commited some kind of fraud/criminal mismanagement/etc. Replace yourself with the government and you get the picture
The moral of the story is don't fat finger yo shit. No do-overs or take-backs. Eat your mistakes, same as anyone else.
If you don't want to lose ever then talk to Teh Gun. It yearns to speak anyway.
I am Chumbawamba.
There was NO - I repeat - NO corresponding uptick in the cash DXY index! Flat out fact, either a rogue trade or "fat finger" of which anyone trading spot forex on IB or IB linked trading platforms is all to well aware.
Ok so say there are 4000 of us reading this post. Say we each decide to buy one DXY contract at about the same time. Are each of these going to be reversed becuse of error? Just wondering.
Problems with believing this to be an error:
1) The middle of the night appearance, before NY markets are open.
2) The peculiar similarity to the UUP spike earlier this month which came just a day or 2 after some massive UUP call buying.
3) The odd coincidence of a Goldman Sachs report -- the day before -- mentioning the potential for a 3-day (or 3-month) 20% USD rally.
Rationally, I understand the "mistake" argument. But I can't help but wonder...
Lets say I make an intentional mistake on a dollar futures order. However, I kindly tell a trusted friend of my intent in advance and he/she takes a favorable position on the s&p futes. Then, I admit my fat fingerrrrrrrrrr (oops, there it goes again) to exchange and they have the order reversed.
Will anyone know my friend made a nice profit on the s&p futessssssssssssssssssssssssss. Sorry, happened again.
Yes and who will admit to earning dosh on index futures dropping by being short just before and then closed on nice profit
but.. the ones that got stopped out of longs... sorry sir, that was the price the futures traded at, at the time you were stopped out...
you just gave away the whole plot to the movie about the PPT.
I thought zero hedge and tyler knew more about trading than is being revealed. Obvious fat finger on a thinly traded index. no move in spot, no move in highly correlated futures (eur/usd) and no move in most heavily traded contract in US (ed). I've seen fat fingers move emini S&P 40-50 handles in the middle of the day, all busted above certain limit, as is being done here. No conspiracy here, especially when any carry trade is NOT going to use these contracts, they would unwind in spot, or hedge using other vehicles.
P.S if your crying and whining because it's "unfair" and "i shoulda been right" and "thats BS" you should not be trading.
So just to be fair they also DK's the S&P futures that mirrored the same short term spike, albeit in the opposite direction, right?
No? Well, let's see who benefited from that one, and let's match it against whoever was responsible for the ICE trade.
Fat finger? Once maybe. Twice in less than three weeks? A pattern begins to emerge.
Good point, wonder what the SPY did at those exact points during these trades
AndyC
who even watches these futures anyway?
And if oil popped $10 dollars on accident all you people would be dying to have the trade busted. No one moves stuff like that. You can't be sure they will bust, so as a stupid test it wouldn't be worth it to lose 10's of millions of dollars. Ive had it go both ways with busting and you are not ever really sure. Also alot of exchanges have rules for max price fluctuations and clip sizes that can effect market.
I'm wondering if there's a correlation between these DXY trades and the yields on Treasuries going negative. There's a lot of strange action going on with currencies.
http://online.barrons.com/article/SB125869502873557185.html?mod=BOL_hpp_dc
You can tell the Middle Eastern nations are getting nervous because Kuwait just said the Gulf regional currency won't be ready until next year:http://news.yahoo.com/s/afp/20091117/wl_mideast_afp/gulfgcceconomyforexmoneykuwait_20091117110745
The thing that's strange about that is that no one had asked them to comment on it.
I am so glad the nukes are neither on Wall Street, nor in Washington.
i have 1000 shares of UUP that would have gone into the money.
i have 1000 shares of UUP that would have gone into the money.
The rapid drop in EUR/USD spot on Nov 3 had caused me to take
a short position, which I had to close for a loss on the
unexpected reversal. Today I avoided that trade because it
looked like exactly the same set-up, and apparently it was.
Looks like manipulation to me
I don't know when but at one point in the early morning, e S&Pmini 15 min red candlestick popped up so big it didn't fit the page-- i refreshed the screen and it went away...i wanted to believe that it was just an electronic glitch--so much for wishful thinking.
I had no DK'ed trades, but the potential manipulation impacted my portofolio position. I have substantial investments in DRR, Rydex Strong Dollar, and cash in my freakin' mattress. I also have SPY puts, SLV puts, and SDS. I guess low volume price volatility is a one way reflation trade... deflationary moves are not allowed. House of cards... tumbling soon near you.
My long term USD indicator has been giving BULLISH warnings for some time and I'm still expecting a USD rally.
http://www.zerohedge.com/forum/market-outlook-0
There has been corollary action in the currency markets. On Nov. 2 the USD and EUR spiked up against the South African
Rand more than 3100 pips in less than an hour; basically, totally unprecedented for that pair. Everyone had been talking over the weekend about a violent dollar reversal move, and presto, you get the mother of all stop hunts. Brokers et. al. talked up the same fat finger explanation BS which morphed into an erroneous margin call, whatever. After the spike, the Rand continued to pound the Dollar and the Euro. Isn't it more likely ICE was in effect stop hunting, as they are worried about a violent leg up and are CYA? What better confirmation of an impending trend reversal- if those sphincters are that scared- time to double, er, triple down on the long Dollar trade. We live in interesting times.
Curiously, the news of the November 3 cancellation was reported by Reuters India:
http://in.reuters.com/article/hotStocksNews/idINTRE5A25BC20091103
What's most interesting is that the overall upward movement didn't appear to be all THAT high - there's certainly nothing about it cracking 80 yet they cancelled EIGHT THOUSAND trades??
Funny, that date also coincides with the roughly ten-day halt to stocks sliding...
The Fed boxed itself- the dollar will have to regain strength just avoid the currency crisis. Just think how this all played out. The biggest deflationary scare ever and everyone is freaking out about hyperinflation. This Fed has created yet another economic term-hyperdisinflation depression. Deflation for the common folk but inflationary growth in commodities and assets. To avoid total dollar revulsion the dollar will have to move up to placate he Chinese and Europeans before it's too late. Senior currencies get very strong in deflationary deleveraging flights. Short bonds are near negative and there was a run to UUP on 2 occasions. Plus UUP is so popular it decoupled from the underlying asset and they have to make more shares so Goldman can pile into it when Ben tells them to